Pipeline will take Eagle Ford gas to Mexico

Updated 8:49 pm, Friday, February 22, 2013

Houston-based NET Midstream on Friday announced it will build a 124-mile pipeline to transport natural gas from the Eagle Ford Shale region to the Mexican border.

The deal, terms of which were not disclosed, is anchored by a long-term agreement to transport 2.1 billion cubic feet of gas per day with MGI Supply Ltd. a subsidiary of Mexico's state-owned gas company.

NET Midstream's subsidiary, NET Mexico Pipeline LP, will build the 42-inch pipeline from a hub in Agua Dulce in Nueces County to a point near Rio Grande City in Starr County.

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Although Mexico has vast natural gas reserves, it hasn't been able to develop them quickly enough to meet the country's consumption, which has been climbing at four times the pace of overall economic growth at times in the past decade.

Mexican officials in August announced that the government's petroleum monopoly, Petroleos Mexicanos, or Pemex, would use a Cayman Islands subsidiary to help finance a pipeline connecting the Agua Dulce gas hub to Mexico's pipeline system on the border outside McAllen.

It would feed South Texas gas to the planned Los Ramones pipeline, which will run some 700 miles from the border through Monterrey and on to Aguascalientes state, supplying Mexico's rapidly developing automotive manufacturing heartland.

Development of the NET Mexico Pipeline will start this year and continue through 2014, with the pipeline coming online in December 2014.

“NET Mexico Pipeline will be an important source of supply to meet Mexico's growing demand for natural gas” said Joe Gutierrez, co-president of NET, in a press release. “NET Mexico is a natural next step in our pipeline system, as we connect abundant gas supply from the Eagle Ford Shale to expanding power generation and industrial markets in Mexico.”

NET Midstream operates three pipeline systems in the Eagle Ford Shale region — one from La Salle County to the Agua Dulce hub, one that serves the city of Corpus Christi and one that supplies a power plant in Pearsall.